Norwegian Cruise Line Holdings Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Business Update
Norwegian Cruise Line Holdings reported its 2021 financial results, revealing a net loss of $(4.5) billion, or EPS of $(12.33). Although total revenue fell 49.4% to $0.6 billion due to pandemic impacts, occupancy improved to 51.4% in Q4 2021. The company aims for 85% operational capacity by Q1 2022, with expectations of positive cash flow and adjusted net income for H2 2022. Current advance ticket sales are at $1.8 billion, with strong booking demand for 2023. Liquidity stands at $2.7 billion, aided by strategic debt transactions in February 2022.
- Expecting 85% of operational capacity by end of Q1 2022.
- Positive adjusted net income anticipated for second half of 2022.
- Current advance ticket sales balance is $1.8 billion, indicating strong demand.
- 2021 total revenue decreased 49.4% to $0.6 billion compared to 2020.
- GAAP net loss for 2021 was $(4.5) billion, wider than $(4.0) billion in 2020.
- Monthly average cash burn projected to increase to $390 million in Q1 2022.
Company’s Great Cruise Comeback Continues with Approximately
Net Booking Volumes Continue Sequential Improvement Post Omicron
Second Half 2022 Booked Position in Line with Strong 2019 and at Higher Pricing
MIAMI, Feb. 24, 2022 (GLOBE NEWSWIRE) -- Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (together with NCL Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian” or the “Company”) today reported financial results for the fourth quarter and full year ended December 31, 2021 and provided a business update.
“We launched our Great Cruise Comeback in late July 2021 and in five short months, the teams at Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises have restarted operations on
Resumption of Cruise Operations
The Company continues to execute on the phased relaunch plans for its 28-ship fleet. Beginning in December 2021, the spread of the Omicron variant of COVID-19, with its increased transmissibility, caused several operational challenges and disruptions, including additional travel restrictions, increased health-related protocols, and certain port closures, which led to the temporary and voluntary cancellation of certain voyages in the fourth quarter of 2021 and first quarter of 2022, and the postponement of the restart of certain of our vessels. By year end 2021, the Company had approximately
As a result of Omicron-related disruptions, the Company now expects to have
All voyages across the Company’s three brands continue to operate under our robust science-backed SailSAFE health and safety program. As part of this program, our policy requires our entire crew and all guests age 12 and over be fully vaccinated. In addition, our comprehensive SailSAFE protocols include universal COVID-19 testing prior to embarkation. The Company’s stringent vaccination policy applies across all voyages on its three brands as the Company believes this is the safest way to operate in the current global public health environment. In 2021, the Company’s brands safely carried over 230,000 guests who had prevalence rates vastly lower than what has been experienced on land during the pandemic. These health and safety measures will be continuously evaluated and modified, with guidance from the SailSAFE Global Health and Wellness Council, as science, technology and the prevalence of COVID-19 evolve.
The Company has informed the Centers for Disease Control and Prevention (CDC) of its three brands opting into the agency’s COVID-19 Program for Cruise Ships Operating in U.S. Waters, the agency’s voluntary COVID-19 risk mitigation program for foreign-flagged cruise ships operating in U.S. waters.
Booking Environment and Outlook
Net booking volumes at the beginning of the fourth quarter of 2021 continued to demonstrate substantial week-over-week sequential growth after the slowdown in booking activity caused by the Delta variant of COVID-19. Net booking volumes in the latter part of the fourth quarter of 2021 began to be negatively impacted by the Omicron variant of COVID-19, primarily for close-in voyages in the first and second quarters of 2022. In recent weeks, as the Omicron wave subsided, net booking trends have improved sequentially. As a result, the Company’s current cumulative booked position for the first half of 2022 is below the extraordinarily strong levels of 2019 at substantially higher prices even when including the dilutive impact of future cruise credits (FCCs), while booked position for the second half, when the full fleet is expected to be back in operation, is in line with the comparable 2019 period and at higher prices, also including the impact of FCCs. Booked position for each quarter compared to the comparable quarter in 2019 improves sequentially through the year. Booking trends for 2023 demonstrate continued strong demand for sailings in the medium and longer term with booked position and pricing meaningfully higher and at record levels when compared to bookings for 2020 in 2019.
The Company’s advance ticket sales balance was
Liquidity, Cash Burn and Financial Recovery Plan
The Company continues to take proactive measures to enhance liquidity and financial flexibility in the current environment and optimize its balance sheet. As of December 31, 2021, the Company’s total debt position was
The Company has taken the following additional actions to enhance its liquidity profile and financial flexibility since the end of the third quarter:
- In November 2021, the Company completed a series of balance sheet and cash flow optimization transactions. As a result of these strategic transactions, the Company reduced its annual interest expense, lowered leverage, extended the Company’s debt maturity profile and increased its liquidity. In addition, assuming the
1.125% exchangeable senior notes due 2027 that were issued then are settled entirely in cash, at the Company’s election, the Company will also benefit from a net reduction in its diluted shares outstanding of approximately 5.2 million shares2. For additional details on this transaction view the Company’s press release and investor presentation. - In February 2022, the Company raised approximately
$2.1 billion through a series of debt transactions to further optimize its balance sheet. The proceeds from these transactions were used to redeem all of the outstanding12.25% senior secured notes due 2024 and10.250% senior secured notes due 2026, and are expected to be used to make principal payments on debt maturing in the short-term, including to pay any accrued and unpaid interest thereon, as well as related premiums, fees and expenses, in each case. In addition, in connection with these transactions, certain collateral was released, and debt maturities were extended.
The combined benefit of the above transactions is expected to result in annual cash interest expense savings of approximately
The Company's monthly average cash burn for the fourth quarter of 2021 was approximately
Cash burn rates include ongoing ship operating expenses, administrative operating expenses, interest expense, taxes, debt deferral fees and expected non-newbuild capital expenditures and excludes cash refunds of customer deposits as well as cash inflows from new and existing bookings, newbuild related capital expenditures and other working capital changes. Future cash burn rate estimates also exclude unforeseen expenses. The fourth quarter 2021 cash burn rate and first quarter 2022 estimate reflect the deferral of debt amortization and previously agreed to newbuild related payments.
“Momentum continues building as we approach
_________________________________
1 See “Terminology” and “Non-GAAP Financial Measures” below for additional information about Adjusted Net Income.
2 Actual number of shares issued upon settlement may differ.
Full Year 2021 Results
GAAP net loss was
Total revenue decreased
Total cruise operating expense decreased
Fuel price per metric ton, net of hedges increased to
Interest expense, net was
Other income (expense), net was income of
Income tax expense was
Fourth Quarter 2021 Results
GAAP net loss was
Revenue increased to
Total cruise operating expense increased
Fuel price per metric ton, net of hedges, increased to
Interest expense, net was
Other income (expense), net was income of
Outlook
As a result of the COVID-19 pandemic, while the Company cannot estimate the impact on its business, financial condition or near- or longer-term financial or operational results with certainty, it will report a net loss for the first quarter of 2022 and expects to report a net loss until the Company is able to resume regular voyages. As previously stated, based on its current trajectory and market and public health conditions, the Company expects to have positive Adjusted Net Income for the second half of 2022. The Company does not provide estimated future results on a GAAP basis because the Company is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of certain gains and charges. These items are uncertain and will depend on several factors, including industry conditions, and could be material to the Company’s results computed in accordance with GAAP.
The following reflects the Company’s expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
| Full Year 2022 | ||||
| Fuel consumption in metric tons | 900,000 | |||
| Fuel price per metric ton, net of hedges | ||||
| Effect on Adjusted EPS of a | ||||
As of December 31, 2021, the Company had hedged approximately
| 2022 | 2023 | 2024 | ||||||
| % of HFO Consumption Hedged1 | - | |||||||
| Average USGC Price / Barrel | N/A | - | ||||||
| Average Brent Price / Barrel | - | |||||||
| % of MGO Consumption Hedged | 1 | - | ||||||
| Average Gasoil Price / Barrel | - | |||||||
| Total % of Consumption Hedged | - | |||||||
(1) USGC derivatives were de-designated for accounting purposes in the fourth quarter of 2020 and first quarter of 2021. Both our USGC and Brent derivatives represent economic hedges and may be designated or re-designated as accounting hedges in the future.
Anticipated non-newbuild capital expenditures for full year 2022 are expected to be approximately
Interest Expense, net is expected to be approximately
Conference Call
The Company has scheduled a conference call for Thursday, February 24, 2022 at 10:00 a.m. Eastern Time to discuss fourth quarter and full year 2021 results and provide a business update. A link to the live webcast along with a slide presentation can be found on the Company’s Investor Relations website at https://www.nclhltd.com/investors. A replay of the conference call will also be available on the website for 30 days after the call.
About Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. With a combined fleet of 28 ships with nearly 60,000 berths, these brands offer itineraries to more than 490 destinations worldwide. The Company has nine additional ships scheduled for delivery through 2027, comprising approximately 24,000 berths.
About SailSAFE
Norwegian Cruise Line Holdings Ltd. established its SailSAFE health and safety program in response to the unique challenges of the COVID-19 global pandemic to protect guests, crew and communities visited. SailSAFE is a robust and comprehensive health and safety strategy with new and enhanced protocols to create multiple layers of protection against COVID-19. This science-backed plan for a safe and healthy return to cruising was developed in conjunction with a diverse group of globally recognized experts and will be continuously improved, modified and refined using the best available science and technology. For more information on the SailSAFE health and safety program please visit http://www.nclhltd.com/Health-and-Safety.
About the SailSAFE Global Health and Wellness Council
The SailSAFE Global Health and Wellness Council (“Council”) was established by Norwegian Cruise Line Holdings Ltd. to provide expert advice on the implementation, compliance with and continuous improvement of the Company’s SailSAFE health and safety program. The Council will complement the work of the Healthy Sail Panel and continuously evaluate and identify ways to improve health and safety standards, utilizing the best technologies and information available. The Council is cross-functional, diverse and extensively experienced, comprised of four experts at the forefront of their fields and led by Chairman of the Council, Dr. Scott Gottlieb, former commissioner of the U.S. Food and Drug Administration.
Terminology
Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other supplemental adjustments.
Adjusted EPS. Adjusted Net Loss divided by the number of diluted weighted-average shares outstanding.
Adjusted Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense adjusted for supplemental adjustments.
Adjusted Net Income. Net income, adjusted for non-cash compensation expense and any potential impacts associated with financing activities.
Adjusted Net Loss. Net loss adjusted for supplemental adjustments.
Berths. Double occupancy capacity per cabin (single occupancy per studio cabin) even though many cabins can accommodate three or more passengers.
Capacity Days. Berths available for sale multiplied by the number of cruise days for the period for ships in service.
Constant Currency. A calculation whereby foreign currency-denominated revenues and expenses in a period are converted at the U.S. dollar exchange rate of a comparable period in order to eliminate the effects of foreign exchange fluctuations.
EBITDA. Earnings before interest, taxes, and depreciation and amortization.
EPS. Diluted loss per share.
GAAP. Generally accepted accounting principles in the U.S.
Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.
Net Cruise Cost. Gross Cruise Cost less commissions, transportation and other expense and onboard and other expense.
Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense.
Occupancy Percentage or Load Factor. The ratio of Passenger Cruise Days to Capacity Days. A percentage in excess of
Operating Cash Flow. Net cash provided by (used in) operating activities.
Passenger Cruise Days. The number of passengers carried for the period, multiplied by the number of days in their respective cruises.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Net Cruise Cost, Adjusted Net Cruise Cost Excluding Fuel, Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Income and Adjusted EPS, to enable us to analyze our performance. See “Terminology” for the definitions of these and other non-GAAP financial measures. We utilize Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to manage our business on a day-to-day basis. In measuring our ability to control costs in a manner that positively impacts net income (loss), we believe changes in Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance. As a result of our voluntary suspension of sailings from March 2020 until July 2021, we did not have any Capacity Days during the suspension period. Accordingly, we have not presented herein per Capacity Day data for the three months or year ended December 31, 2021 or December 31, 2020.
As our business includes the sourcing of passengers and deployment of vessels outside of the U.S., a portion of our revenue and expenses are denominated in foreign currencies, particularly British pound, Canadian dollar, euro and Australian dollar, which are subject to fluctuations in currency exchange rates versus our reporting currency, the U.S. dollar. In order to monitor results excluding these fluctuations, we calculate certain non-GAAP measures on a Constant Currency basis, whereby current period revenue and expenses denominated in foreign currencies are converted to U.S. dollars using currency exchange rates of the comparable period. We believe that presenting these non-GAAP measures on both a reported and Constant Currency basis is useful in providing a more comprehensive view of trends in our business.
We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance. We also believe that Adjusted EBITDA is a useful measure in determining our performance as it reflects certain operating drivers of our business, such as sales growth, operating costs, marketing, general and administrative expense and other operating income and expense. Adjusted EBITDA is not a defined term under GAAP nor is it intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income (loss), as it does not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and it includes other supplemental adjustments.
In addition, Adjusted Net Loss, Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net loss and EPS. We use Adjusted Net Loss, Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparison to our historical performance. In addition, management uses Adjusted EPS as a performance measure for our incentive compensation during normal operations. The amounts excluded in the presentation of these non-GAAP financial measures may vary from period to period; accordingly, our presentation of Adjusted Net Loss and Adjusted EPS may not be indicative of future adjustments or results. For example, for the year ended December 31, 2020, we incurred
You are encouraged to evaluate each adjustment used in calculating our non-GAAP financial measures and the reasons we consider our non-GAAP financial measures appropriate for supplemental analysis. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur expenses similar to the adjustments in our presentation. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of our non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our non-GAAP financial measures may not be comparable to other companies. Please see a historical reconciliation of these measures to the most comparable GAAP measure presented in our consolidated financial statements below.
Cautionary Statement Concerning Forward-Looking Statements
Some of the statements, estimates or projections contained in this release are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained, or incorporated by reference, in this release, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations (including those regarding expected fleet additions, our ability to weather the impacts of the COVID-19 pandemic, our expectations regarding the resumption of cruise voyages and the timing for such resumption of cruise voyages, the implementation of and effectiveness of our health and safety protocols, operational position, demand for voyages, plans or goals for our sustainability program and decarbonization efforts, our expectations for future cash flows and profitability, financing opportunities and extensions, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures) are forward-looking statements. Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: the spread of epidemics, pandemics and viral outbreaks and specifically, the COVID-19 pandemic, including its effect on the ability or desire of people to travel (including on cruises), which is expected to continue to adversely impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price; implementing precautions in coordination with regulators and global public health authorities to protect the health, safety and security of guests, crew and the communities we visit and to comply with regulatory restrictions related to the pandemic; legislation prohibiting companies from verifying vaccination status; our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and be in compliance with maintenance covenants and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; our ability to work with lenders and others or otherwise pursue options to defer, renegotiate, refinance or restructure our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises; our need for additional financing or financing to optimize our balance sheet, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing which may be dilutive to existing shareholders; the unavailability of ports of call; future increases in the price of, or major changes or reduction in, commercial airline services; changes involving the tax and environmental regulatory regimes in which we operate, including new regulations aimed at reducing greenhouse gas emissions; the accuracy of any appraisals of our assets as a result of the impact of the COVID-19 pandemic or otherwise; our success in controlling operating expenses and capital expenditures; trends in, or changes to, future bookings and our ability to take future reservations and receive deposits related thereto; adverse events impacting the security of travel, such as terrorist acts, armed conflict and threats thereof, acts of piracy, and other international events; adverse incidents involving cruise ships; adverse general economic and related factors, such as fluctuating or increasing levels of interest, unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; breaches in data security or other disturbances to our information technology and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection; changes in fuel prices and the type of fuel we are permitted to use and/or other cruise operating costs; mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities; the risks and increased costs associated with operating internationally; our inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues; our inability to obtain adequate insurance coverage; pending or threatened litigation, investigations and enforcement actions; any further impairment of our trademarks, trade names or goodwill; volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; our reliance on third parties to provide hotel management services for certain ships and certain other services; fluctuations in foreign currency exchange rates; our expansion into new markets and investments in new markets and land-based destination projects; overcapacity in key markets or globally; and other factors set forth under “Risk Factors” in our most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q and subsequent filings with the Securities and Exchange Commission. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. In addition, some of our executive officers and directors have not sold their shares in us since the beginning of the COVID-19 pandemic as a gesture of support for our Company as they navigated us through unprecedented challenges. Now that we have resumed operations, we anticipate that our executive officers and directors may sell shares under Rule 10b5-1 plans beginning in the first quarter of 2022 as part of their ordinary course financial planning. The above examples are not exhaustive and new risks emerge from time to time. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. These forward-looking statements speak only as of the date made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.
| Investor Relations & Media Contact |
| Edel Cruz |
| (305) 468-2339 InvestorRelations@nclcorp.com |
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||
| Revenue | |||||||||||||||||||||
| Passenger ticket | $ | 304,875 | $ | 7,817 | $ | 392,752 | $ | 867,110 | |||||||||||||
| Onboard and other | 182,562 | 1,762 | 255,234 | 412,798 | |||||||||||||||||
| Total revenue | 487,437 | 9,579 | 647,986 | 1,279,908 | |||||||||||||||||
| Cruise operating expense | |||||||||||||||||||||
| Commissions, transportation and other | 95,589 | 9,703 | 143,524 | 380,710 | |||||||||||||||||
| Onboard and other | 32,196 | 2,789 | 54,037 | 85,678 | |||||||||||||||||
| Payroll and related | 214,214 | 79,839 | 537,439 | 521,301 | |||||||||||||||||
| Fuel | 125,921 | 42,472 | 301,852 | 264,712 | |||||||||||||||||
| Food | 35,685 | 5,730 | 62,999 | 65,369 | |||||||||||||||||
| Other | 214,094 | 66,459 | 508,186 | 375,291 | |||||||||||||||||
| Total cruise operating expense | 717,699 | 206,992 | 1,608,037 | 1,693,061 | |||||||||||||||||
| Other operating expense | |||||||||||||||||||||
| Marketing, general and administrative | 273,632 | 186,564 | 891,452 | 745,345 | |||||||||||||||||
| Depreciation and amortization | 182,978 | 162,903 | 700,845 | 717,840 | |||||||||||||||||
| Impairment loss | — | — | — | 1,607,797 | |||||||||||||||||
| Total other operating expense | 456,610 | 349,467 | 1,592,297 | 3,070,982 | |||||||||||||||||
| Operating loss | (686,872 | ) | (546,880 | ) | (2,552,348 | ) | (3,484,135 | ) | |||||||||||||
| Non-operating income (expense) | |||||||||||||||||||||
| Interest expense, net | (950,020 | ) | (159,205 | ) | (2,072,925 | ) | (482,313 | ) | |||||||||||||
| Other income (expense), net | 66,489 | (1,324 | ) | 123,953 | (33,599 | ) | |||||||||||||||
| Total non-operating income (expense) | (883,531 | ) | (160,529 | ) | (1,948,972 | ) | (515,912 | ) | |||||||||||||
| Net loss before income taxes | (1,570,403 | ) | (707,409 | ) | (4,501,320 | ) | (4,000,047 | ) | |||||||||||||
| Income tax expense | (2,318 | ) | (31,524 | ) | (5,267 | ) | (12,467 | ) | |||||||||||||
| Net loss | $ | (1,572,721 | ) | $ | (738,933 | ) | $ | (4,506,587 | ) | $ | (4,012,514 | ) | |||||||||
| Weighted-average shares outstanding | |||||||||||||||||||||
| Basic | 391,737,562 | 293,892,873 | 365,449,967 | 254,728,932 | |||||||||||||||||
| Diluted | 391,737,562 | 293,892,873 | 365,449,967 | 254,728,932 | |||||||||||||||||
| Loss per share | |||||||||||||||||||||
| Basic | $ | (4.01 | ) | $ | (2.51 | ) | $ | (12.33 | ) | $ | (15.75 | ) | |||||||||
| Diluted | $ | (4.01 | ) | $ | (2.51 | ) | $ | (12.33 | ) | $ | (15.75 | ) | |||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Net loss | $ | (1,572,721 | ) | $ | (738,933 | ) | $ | (4,506,587 | ) | $ | (4,012,514 | ) | ||||||
| Other comprehensive income (loss): | ||||||||||||||||||
| Shipboard Retirement Plan | 98 | 40 | 393 | 345 | ||||||||||||||
| Cash flow hedges: | ||||||||||||||||||
| Net unrealized gain (loss) | (36,882 | ) | 112,030 | (110,379 | ) | (51,642 | ) | |||||||||||
| Amount realized and reclassified into earnings | 16,689 | 19,817 | 65,017 | 106,670 | ||||||||||||||
| Total other comprehensive income (loss) | (20,095 | ) | 131,887 | (44,969 | ) | 55,373 | ||||||||||||
| Total comprehensive loss | $ | (1,592,816 | ) | $ | (607,046 | ) | $ | (4,551,556 | ) | $ | (3,957,141 | ) | ||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| (in thousands, except share data) | ||||||||||
| December 31, | December 31, | |||||||||
| 2021 | 2020 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 1,506,647 | $ | 3,300,482 | ||||||
| Short-term investments | 240,000 | — | ||||||||
| Accounts receivable, net | 1,167,473 | 20,578 | ||||||||
| Inventories | 118,205 | 82,381 | ||||||||
| Prepaid expenses and other assets | 269,243 | 154,103 | ||||||||
| Total current assets | 3,301,568 | 3,557,544 | ||||||||
| Property and equipment, net | 13,528,806 | 13,411,226 | ||||||||
| Goodwill | 98,134 | 98,134 | ||||||||
| Tradenames | 500,525 | 500,525 | ||||||||
| Other long-term assets | 1,300,804 | 831,888 | ||||||||
| Total assets | $ | 18,729,837 | $ | 18,399,317 | ||||||
| Liabilities and shareholders' equity | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of long-term debt | $ | 876,890 | $ | 124,885 | ||||||
| Accounts payable | 233,172 | 83,136 | ||||||||
| Accrued expenses and other liabilities | 1,059,034 | 596,056 | ||||||||
| Advance ticket sales | 1,561,336 | 1,109,826 | ||||||||
| Total current liabilities | 3,730,432 | 1,913,903 | ||||||||
| Long-term debt | 11,569,700 | 11,681,234 | ||||||||
| Other long-term liabilities | 997,055 | 450,075 | ||||||||
| Total liabilities | 16,297,187 | 14,045,212 | ||||||||
| Commitments and contingencies | ||||||||||
| Shareholders' equity: | ||||||||||
| Ordinary shares, | 417 | 316 | ||||||||
| Additional paid-in capital | 7,513,725 | 4,889,355 | ||||||||
| Accumulated other comprehensive income (loss) | (285,086 | ) | (240,117 | ) | ||||||
| Retained deficit | (4,796,406 | ) | (295,449 | ) | ||||||
| Total shareholders' equity | 2,432,650 | 4,354,105 | ||||||||
| Total liabilities and shareholders' equity | $ | 18,729,837 | $ | 18,399,317 | ||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (in thousands) | |||||||||||||||
| Year Ended | |||||||||||||||
| December 31, | |||||||||||||||
| 2021 | 2020 | ||||||||||||||
| Cash flows from operating activities | |||||||||||||||
| Net loss | $ | (4,506,587 | ) | $ | (4,012,514 | ) | |||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||
| Depreciation and amortization expense | 758,604 | 739,619 | |||||||||||||
| Impairment loss | — | 1,607,797 | |||||||||||||
| Deferred income taxes, net | 78 | 12,765 | |||||||||||||
| Gain on derivatives | (39,842 | ) | (8,501 | ) | |||||||||||
| Loss on extinguishment of debt | 1,399,816 | 10,480 | |||||||||||||
| Provision for bad debts and inventory obsolescence | 19,284 | 31,756 | |||||||||||||
| Gain on involuntary conversion of assets | (9,486 | ) | (1,496 | ) | |||||||||||
| Share-based compensation expense | 124,077 | 111,297 | |||||||||||||
| Payment-in-kind interest premium | — | 19,349 | |||||||||||||
| Net foreign currency adjustments | (9,865 | ) | 8,584 | ||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||
| Accounts receivable, net | (1,159,998 | ) | 30,797 | ||||||||||||
| Inventories | (37,481 | ) | 10,555 | ||||||||||||
| Prepaid expenses and other assets | 24,004 | (89,528 | ) | ||||||||||||
| Accounts payable | 152,026 | (21,419 | ) | ||||||||||||
| Accrued expenses and other liabilities | 295,451 | (193,938 | ) | ||||||||||||
| Advance ticket sales | 521,910 | (811,846 | ) | ||||||||||||
| Net cash used in operating activities | (2,468,009 | ) | (2,556,243 | ) | |||||||||||
| Cash flows from investing activities | |||||||||||||||
| Additions to property and equipment, net | (752,843 | ) | (946,545 | ) | |||||||||||
| Purchases of short-term investments | (1,010,000 | ) | — | ||||||||||||
| Proceeds from maturities of short-term investments | 770,000 | — | |||||||||||||
| Cash paid on settlement of derivatives | (23,496 | ) | (31,520 | ) | |||||||||||
| Other | 12,295 | 2,703 | |||||||||||||
| Net cash used in investing activities | (1,004,044 | ) | (975,362 | ) | |||||||||||
| Cash flows from financing activities | |||||||||||||||
| Repayments of long-term debt | (2,113,063 | ) | (892,481 | ) | |||||||||||
| Proceeds from long-term debt | 2,601,317 | 6,075,090 | |||||||||||||
| Common share issuance proceeds, net | 2,665,843 | 1,541,708 | |||||||||||||
| Proceeds from employee related plans | 3,141 | 5,557 | |||||||||||||
| Net share settlement of restricted share units | (16,687 | ) | (15,407 | ) | |||||||||||
| Early redemption premium | (1,354,882 | ) | (1,376 | ) | |||||||||||
| Deferred financing fees | (107,451 | ) | (133,880 | ) | |||||||||||
| Net cash provided by financing activities | 1,678,218 | 6,579,211 | |||||||||||||
| Net increase (decrease) in cash and cash equivalents | (1,793,835 | ) | 3,047,606 | ||||||||||||
| Cash and cash equivalents at beginning of the period | 3,300,482 | 252,876 | |||||||||||||
| Cash and cash equivalents at end of the period | $ | 1,506,647 | $ | 3,300,482 | |||||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| The following table sets forth selected statistical information: | |||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||
| Passengers carried | 174,517 | — | 232,448 | 499,729 | |||||||||||||||||
| Passenger Cruise Days | 1,376,243 | — | 1,778,899 | 4,278,602 | |||||||||||||||||
| Capacity Days | 2,675,353 | — | 3,376,703 | 4,123,858 | |||||||||||||||||
| Occupancy Percentage | 51.4 | % | 52.7 | % | 103.8 | % | |||||||||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Cruise Cost Excluding Fuel were calculated as follows (in thousands): | |||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||
| 2021 | 2021 | ||||||||||||||||||||
| Constant | Constant | ||||||||||||||||||||
| 2021 | Currency | 2020 | 2021 | Currency | 2020 | ||||||||||||||||
| Total cruise operating expense | $ | 717,699 | $ | 717,086 | $ | 206,992 | $ | 1,608,037 | $ | 1,601,030 | $ | 1,693,061 | |||||||||
| Marketing, general and administrative expense | 273,632 | 273,739 | 186,564 | 891,452 | 887,970 | 745,345 | |||||||||||||||
| Gross Cruise Cost | 991,331 | 990,825 | 393,556 | 2,499,489 | 2,489,000 | 2,438,406 | |||||||||||||||
| Less: | |||||||||||||||||||||
| Commissions, transportation and other expense | 95,589 | 95,527 | 9,703 | 143,524 | 143,186 | 380,710 | |||||||||||||||
| Onboard and other expense | 32,196 | 32,196 | 2,789 | 54,037 | 54,037 | 85,678 | |||||||||||||||
| Net Cruise Cost | 863,546 | 863,102 | 381,064 | 2,301,928 | 2,291,777 | 1,972,018 | |||||||||||||||
| Less: Fuel expense | 125,921 | 125,921 | 42,472 | 301,852 | 301,852 | 264,712 | |||||||||||||||
| Net Cruise Cost Excluding Fuel | 737,625 | 737,181 | 338,592 | 2,000,076 | 1,989,925 | 1,707,306 | |||||||||||||||
| Less Non-GAAP Adjustments: | |||||||||||||||||||||
| Non-cash deferred compensation (1) | 905 | 905 | 666 | 3,619 | 3,619 | 2,665 | |||||||||||||||
| Non-cash share-based compensation (2) | 35,103 | 35,103 | 30,288 | 124,077 | 124,077 | 111,297 | |||||||||||||||
| Adjusted Net Cruise Cost Excluding Fuel | $ | 701,617 | $ | 701,173 | $ | 307,638 | $ | 1,872,380 | $ | 1,862,229 | $ | 1,593,344 | |||||||||
| (1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | |||||||||||||||||||||
| (2) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | |||||||||||||||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Adjusted Net Loss and Adjusted EPS were calculated as follows (in thousands, except share and per share data): | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net loss | $ | (1,572,721 | ) | $ | (738,933 | ) | $ | (4,506,587 | ) | $ | (4,012,514 | ) | |||
| Non-GAAP Adjustments: | |||||||||||||||
| Non-cash deferred compensation (1) | 1,003 | 992 | 4,012 | 3,967 | |||||||||||
| Non-cash share-based compensation (2) | 35,103 | 30,288 | 124,077 | 111,297 | |||||||||||
| Extinguishment and modification of debt (3) | 771,587 | — | 1,428,813 | 27,795 | |||||||||||
| Amortization of intangible assets (4) | — | 1,510 | — | 9,831 | |||||||||||
| Impairment loss (5) | — | — | — | 1,633,337 | |||||||||||
| Non-cash interest on beneficial conversion feature and payment-in-kind premium (6) | — | 22,382 | — | 26,082 | |||||||||||
| Adjusted Net Loss | $ | (765,028 | ) | $ | (683,761 | ) | $ | (2,949,685 | ) | $ | (2,200,205 | ) | |||
| Diluted weighted-average shares outstanding - Net loss and Adjusted Net Loss | 391,737,562 | 293,892,873 | 365,449,967 | 254,728,932 | |||||||||||
| Diluted loss per share | $ | (4.01 | ) | $ | (2.51 | ) | $ | (12.33 | ) | $ | (15.75 | ) | |||
| Adjusted EPS | $ | (1.95 | ) | $ | (2.33 | ) | $ | (8.07 | ) | $ | (8.64 | ) | |||
| (1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses are included in payroll and related expense and other income (expense), net. | |||||||||||||||
| (2) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. | |||||||||||||||
| (3) Losses on extinguishments and modifications of debt are primarily included in interest expense, net. | |||||||||||||||
| (4) Amortization of intangible assets related to the Acquisition of Prestige are included in depreciation and amortization expense. | |||||||||||||||
| (5) Impairment loss consists of goodwill, trade name and property and equipment impairments. The impairments of goodwill and trade names are included in impairment loss and the impairment of property and equipment is included in depreciation and amortization expense. | |||||||||||||||
| (6) Non-cash interest expense related to a beneficial conversion feature recognized on our exchangeable notes and additional payment-in-kind interest recognized upon transfer to the debt principal, which is recognized in interest expense, net. | |||||||||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| EBITDA and Adjusted EBITDA were calculated as follows (in thousands): | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net loss | $ | (1,572,721 | ) | $ | (738,933 | ) | $ | (4,506,587 | ) | $ | (4,012,514 | ) | |||
| Interest expense, net | 950,020 | 159,205 | 2,072,925 | 482,313 | |||||||||||
| Income tax expense | 2,318 | 31,524 | 5,267 | 12,467 | |||||||||||
| Depreciation and amortization expense | 182,978 | 162,903 | 700,845 | 717,840 | |||||||||||
| EBITDA | (437,405 | ) | (385,301 | ) | (1,727,550 | ) | (2,799,894 | ) | |||||||
| Other (income) expense, net (1) | (66,489 | ) | 1,324 | (123,953 | ) | 33,599 | |||||||||
| Non-GAAP Adjustments: | |||||||||||||||
| Non-cash deferred compensation (2) | 905 | 666 | 3,619 | 2,665 | |||||||||||
| Non-cash share-based compensation (3) | 35,103 | 30,288 | 124,077 | 111,297 | |||||||||||
| Impairment loss (4) | — | — | — | 1,607,797 | |||||||||||
| Adjusted EBITDA | $ | (467,886 | ) | $ | (353,023 | ) | $ | (1,723,807 | ) | $ | (1,044,536 | ) | |||
| (1) Primarily consists of gains and losses, net for forward currency exchanges and derivatives not designated as hedges. | |||||||||||||||
| (2) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses are included in payroll and related expense. | |||||||||||||||
| (3) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. | |||||||||||||||
| (4) Impairment loss consists of goodwill and trade name impairments. | |||||||||||||||
FAQ
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